Draft Carbon Tax Bill Published for Comment

National Treasury

National treasury has published the Draft Carbon Tax Bill for comment.

The finance minister, Nhlanhla Nene, indicated during the Budget in February that the draft bill would be released for comment before the end of 2015.

In a statement, treasury declared that the proposed legislation is a key component of government’s response to climate change challenges.

The draft bill will ensure that a carbon price is put in place thereby determining the external costs of carbon emissions.

Following completion of the consultation process, a revised bill will be placed before cabinet for approval.

The proposed carbon tax consists of, inter alia, a basic 60 per cent tax-free threshold during the first phase of the carbon tax in place from date of implementation until 2020, an additional 10 per cent per cent tax-free allowance for process emissions, an additional tax-free allowance for trade exposed sectors of up to 10 per cent, a carbon offsets tax-free allowance of 5 to 10 per cent and an initial marginal carbon tax rate of R120 per ton CO2-e will apply.

Due to the proposed exemptions, carbon tax will be imposed on only 5 to 40 per cent of actual emissions during the initial period.

Treasury indicated throughout the carbon tax policy process that the intention behind the initiative was to change behaviour and not raise additional revenue.

The plan is to implement carbon taxes in a phased manner.

Draft regulations designed to give effect to the carbon offset scheme will be published for comment early in 2016.

Written comment on the draft bill is invited until 15 December 2015.

It can be emailed to Memory.Machingambi@treasury.gov.za.

Sabinet Cape Town Office

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